The recent global recession has pushed businesses to search for means to efficiently and effectively manage their customers so as to remain competitive. This has led to the rise in the adoption and use of information technology in different business functions. These developments have yielded into the adoption of Electronic Customer Relationship Management (e-CM). However, as this technology sees more prominence the developed countries, many initiatives in developing countries have failed. This study was intended to examine the factors that affect the adoption of e-CRM in developing countries. A case study was conducted in Uganda, in which 150 Small and Medium-sized Enterprises (SMEs) where purposively selected from 30 districts to participate in the study. A self administered questionnaire was used to collect data, which were then coded and analyzed using descriptive statistics. Although the findings indicate that e-CRM was very beneficial in promoting SMEs’ new products, marketing existing products, keeping their customers updated and sharing information, most SMEs faced challenges in adopting to the technology. The main challenges were highlighted as lack of knowledge about the e-CRM, lack of ICT skills, poor infrastructure, lack of top management support and resistance to change. The study gives some valuable recommendations for better adoption of e-CRM in SMEs.